Indian authorities are seeking Rajneesh disciples in Oregon – including the movement’s top financial adviser – in connection with a currency-smuggling investigation that began three years ago.

The continuing investigation is only one legacy of Bhagwan Shree Rajneesh’s controversial tenure in Poona, India. When the guru left his native country in mid-1981 and settled in Central Oregon, most of his disciples left, too, except for a scattered Indian following.

But tales of smuggling – gold, money and drugs – that have dogged the Rajneesh movement since the late 1970s persist. Despite denials from Rajneeshee officials, interviews with Indian authorities and former disciples support many such accounts.

Former sannyasins said black-market currency transactions were routine in Poona, and drug trafficking became almost a cottage industry in the ashram’s environs. Authorities said ashram officials professed ignorance of any illegal activities but nonetheless welcomed well-heeled drug dealers into their midst.

The currency-smuggling case involved an alleged plot to spirit disciples’ donations out of India for transfer to the movement’s new headquarters in Oregon. Indian currency laws sharply limit the amounts of money that can be taken out of the cash-poor country.

Police arrested three Bombay men on June 25, 1983 and searched several homes and businesses as well as the Shree Rajneesh Ashram in Poona. The sweep produced “highly incriminating documents,” according to court records filed by the Enforcement Directorate, an Indian government agency similar to the U.S. Customs Service.

M.H. Khan, an Enforcement Directorate investigator, filed documents in Bombay Metropolitan Magistrate’s Court describing the three suspects as being instrumental in unauthorized currency exchanges and illegal transfers of money. The filing identified the men as:

» Laherchand B. Shah, an importer and former Rajneesh Foundation trustee also known by the sannyasin name Chaitanya Sagar. He was accused of “unauthorized acquisition” and transfer of $100,000 to the United States in late 1982 “through one of the chief sanyasini of the said foundation on her way to the United States.”

» Chandrakant B. Desai, also known by the sannyasin name Anand Yogesh, who runs a construction business with his brother. He was accused of “unauthorized transfers of huge amounts of donations received in India.” Khan said he found evidence that Desai played a role in transferring $28,160 to the United States in June 1981.

» Sudhir K. Khona, a non-sannyasin gum broker and a cousin of an early trustee of the Indian Rajneesh Foundation. He was accused of abetting Shah in the $100,000 transfer. Khan said Khona admitted that sannyasins carried “sizable amounts of foreign exchange,” obtained on the black market, from India to the United States.

Khan said Shah and Khona admitted their involvement in the plot, although all three men later professed innocence.

The three spent 10 days in jail before a judge agreed to set bail at 75,000 rupees for Shah, 30,000 rupees for Khona and 15,000 rupees for Desai. At contemporary exchange rates, Shah’s bail came to about $7,400, Khona’s almost $3,000 and Desai’s almost $1,500.

A.V. Mallya, an assistant enforcement officer, argued against granting bail, noting in a petition that “more arrests have to be made, as a few persons closely linked with the case are not traceable.”

Enforcement Directorate officials questioned eight persons as suspects in the case, said officer L.H. Choukekar. However, several sannyasins mentioned in the confiscated documents had left India and surfaced at Rancho Rajneesh, as the movement calls its 64,229-acre spread in Wasco and Jefferson counties.

Indian officials still seek to arrest one of them – Yoga Mukta, 40, also known as Neela Lakhamshi Shah, an Indian citizen born in Nairobi, Kenya, and one of a series of sannyasins left in charge of the Poona compound after the guru left. A woman identified only as Ma Yoga Mukta was a defendant in a 1982 defamation suit filed in India by Amarsinh Jadhavrao, the Poona landlord who leased a 300-year-old fortress and 225 acres of farmland to the ashram at Saswad, 21 miles southeast of Poona, for what the Rajneeshees ballyhooed as their new commune.

Mukta listed a Rajneeshpuram address on the Jefferson County license for her Dec. 10, 1982, marriage to New York City-born David Stanley Blumenthal, 40, a former Rajneesh Foundation International treasurer known by the sannyasin name Shanti Sagar. Immigration documents showed that she arrived in the United States on Nov. 21, 1982.

In response to a detailed list of questions The Oregonian sent to her by certified mail at Rajneeshpuram, Mukta denied any smuggling. She refused further comment.

Other sannyasins still sought for questioning in the case include:

» Prem Savita, 35, a British accountant also known as Sally-Anne Croft. She ranks second only to Anand Sheela, 35, the guru’s personal secretary and chief of staff, in the power structure at Rajneeshpuram. Savita, the movement’s top financial adviser and managing director of the London-based Rajneesh Services International Ltd., was chief accountant for the Rajneesh Foundation in Poona.

» Siddharth, 36, also known as Chandrakant Lodaya, an Indian citizen and former Rajneesh Foundation accountant. Choukekar said the case alleged that Siddharth coordinated the money smuggling and collected money from sannyasins in India for shipment to the United States. Last fall, he obtained an Oregon driver’s license under his given name, listing a Rajneeshpuram address.

» Yogendra Manu, 48, also known as Manikant Ratansey Khona, a native of Bombay, an early Rajneesh Foundation trustee and a cousin of Sudhir Khona. Jefferson County records showed that Manu married a Mandan, N.D., native, Prem Lolita, 34, also known as Sally Ann Block, in a January 19, 1984, ceremony conducted by Sheela. He listed Rajneeshpuram as his address, but a letter sent there was returned with the notation “unknown at this address.”

“Any of these people should come forward and explain the documents,” Choukekar said.

A July 1983 article in the magazine India Abroad quoted Savita as denying any transfer of money from India to the United States. She said funding for the movement’s U.S. operations came from Europe and other countries. Interviewed in Bombay, the three defendants denied any involvement in smuggling.

Sudhir Khona said that he had given his cousin, Manu, a “paper” for use in what Khona assumed would be a guru transaction and that Manu “misused the paper.” He would not describe the document, but investigators found it in Shah’s house and traced it back to Khona, which prompted his arrest.

Desai contended that someone gave the police a list of sannyasins’ names, including his, and that police subsequently raided the homes of everyone on the list. He refused to answer further questions.

“It’s all bogus,” he said. It’s impossible.”

For his part, Shah denied holding any official position with the Rajneesh Foundation, although the Indian organization listed him as a trustee through 1982. He did say that he had been to Oregon for the 1982 summer festival and that he had even spoken with Rajneesh – a privilege normally reserved for the movement’s elite. Shah also admitted knowing Savita and Mukta but said he last saw them in Bombay in 1982.

The India Abroad article quoted Savita as saying she didn’t understand the smuggling charges, but she did note that “outrageous stories” about Rajneeshees were common in the Indian press.

It was Savita who handled the financial aspects of the Poona ashram’s liquidation, which generated substantial sums in cash, former sannyasins said. High Milne, 37, a London osteopath and martial arts expert who was Rajneesh’s chief bodyguard, recalled seeing Savita at the State Bank of India in Poona, where she was exchanging a suitcase full of rupees for dollars. Milne, whose sannyasin name was Shivamurti, spent 10 years in the movement but dropped out after the move to Oregon.

Former sannyasins said many departing disciples were told to take along suitcases that held ashram property. Sannyasins even wore some of the ashram’s assets – gold forged into heavy bracelets – out of India during the move.

Stephanie J. Gilbert, 40, a London jewelry maker, who used the sannyasin name Magyan Bhakti when she headed the jewelry department in Poona, said she and a man known as Ajito made at least two dozen heavy gold bangles in the weeks before the guru left India.

Maria Grazia Mori, 42, an Italian ex-disciple who used the sannyasin name Deeksha when she was a member of Rajneesh’s inner circle, said she and others – Sheela included – discussed ways of carrying raw gold and gold coins out of the country. Mori said they decided to turn it into jewelry.

Gilbert said Sheela and Yoga Vidya gave the jewelers an assortment of gold items to melt down. Vidya, 38, also known as Ann Phyllis McCarthy, is the Johannesburg-born South African who now heads the Oregon ranch commune.

The gold-smuggling scheme called for individual sannyasins to wear the bangles out of India and to turn them in once the commune reassembled, Gilbert said. Another former sannyasin said that as a precaution, none of the bracelets was on Rajneesh’s flight.

“These things were made to look like cheap brass bangles,” Gilbert said. “I mean we had to make them look really rough. That was the general idea of it.”

Cheap brass bangles were a commonly sold tourist item in India, but the ashram’s copies were made of 22-karat to 24-karat gold, Gilbert said. She said each bracelet was made of a piece of gold about 6 inches long and 3/8-inch square.

The plan apparently worked, although some Rajneeshees have had less fortunate encounters with customs officials since.

Even Savita ran into trouble March 18, 1983, when she flew into San Francisco from London, a customs report showed. Agents said she declared $200 worth of car parts, which she claimed to be carrying for a friend, but a search turned up an undeclared men’s Omega wristwatch valued at $2,737. A sannyasin later retrieved the watch but had to pay $411 in duty – triple the normal amount.

On June 14, 1983, customs agents stopped Pennsylvania-born Prem Anubodhi, 49, also known as Emily Louise Spalding, when she flew into Seattle from Poona. She told the agents she was a Rajneeshpuram farmer, but a search turned up checks and cash totaling $5,001 as well as 3,858 pills of various kinds, including prescription drugs.

Spalding said that the money was for the commune and that she was carrying the drugs for other persons, although she didn’t reclaim the pills after the search. She was released after paying a $250 fine for not declaring the currency.

Last February 18, customs officials conducted random inspections of sannyasins arriving in Portland on a Rajneeshee-chartered flight from Cologne, West Germany, and turned up evidence that sannyasins were being used to import clothing to the commune. The tipoff came when agents found a Rajneeshee man carrying a large canvas bag packed with new women’s clothing.

The man, Deva Mandip, 29, also known as Volker of Adolf Horn, a West German citizen, told customs officials he was one of several sannyasins who were asked to carry bags to the United States. He contended he couldn’t remember who gave him the bag or what he was supposed to do with it once he arrived in Rajneeshpuram, customs reports said.

Customs agents searched others on the flight, including Prem Isabel, 32, also known as Maria Isabel Megret de Serilly, d’Etigny et de Teil de Chapelaine, director of the Rajneeshpuram Chamber of Commerce press relations bureau. Agents found in Isabel’s possession a list of six suitcases, 14 other bags and five parcels – each matched with one of 25 sannyasin names under the heading “sent with.” But the agents didn’t question Isabel about the list.

Former sannyasins said the movement tried to avoid such inconveniences in India by taking advantage of the baksheesh, or bribery, system that pervaded the Indian bureaucracy. Baksheesh was an expected part of life in India.

However, some under-the-counter activity in Poona went beyond Baksheesh and into the high-stakes world of drug smuggling. In the late 1970s, reports of drug smuggling by sannyasins and a series of highly publicized drug arrests focused unwanted attention on the movement.

Former sannyasins said drug traffic was an indirect, yet important, source of donations to the movement in Poona. Although ashram officials remained aloof from the trade, they were not blind to the sources of donations, the former sannyasins said.

Neither were local residents or Indian officials. Records on file in the Bombay High Court detail an investigation launched by Ramkrishna Prabhakar Randive, an assistant charity commissioner in Poona. Court files on the ashram investigation – and the Rajneesh Foundation’s unsuccessful attempts to curb it – contained a 1979 letter in which Randive set forth the citizen complaints that had prompted the inquiry.

“Disciples of Acharya Rajneesh are indulging in smuggling and dealing in opium and ‘charas,’” or hashish, the letter noted. Acharya is a Hindi word meaning teacher.

Yoga Laxmi, 52, also known as Laxmi Thakarsi Kuruwa, then still the guru’s personal secretary, argued that “individual behaviors” such as smuggling had nothing to do with charities and thus were outside the Charity Commission’s purview. She also suggested that citizens with complaints should go to local police.

Poona police already had received complaints about a range of ashram misdeeds, chiefly visa overstays. However, a police report from about 1976 also listed 10 lunacy cases and 13 drug cases involving sannyasins.

An internal Criminal Investigation Division report dated August 26, 1976, was matter-of-fact about the situation. “No doubt that some foreigners – the followers of Shri Rajneesh, have been involved in the narcotic activities,” the report said.

The drug traffic was no secret in the ashram, either. Former sannyasins said drug running began as a way for penniless disciples to make money that would pay for their stays in Poona. Several dealers operated on the fringes of the ashram, they said.

One former sannyasin, a woman who acknowledged that she packaged drugs to make extra money in the late 1970s, said that sannyasins short on cash were sure to hear about drug-running and opportunities through the movement’s thriving grapevine.

“It was just a way to survive,” she said.

The deals varied, sources said. One German sannyasin had a standing offer -- $4,000 to anyone who would carry a drug-lined suitcase out of India. Other deals were more elaborate. The former drug packager said several disciples built handcrafted carrying cases – even chess sets and backgammon boards – for hashish and marijuana smuggling.

“It was beautiful stuff,” she said. “People didn’t want to break it up when they got it.”

Perhaps the most ambitious, albeit ill-fated, smuggling attempt was made in 1979. It involved packing 50 kilograms of marijuana into the frame and furnishings of a hippie-style bus, literally bound for Europe or bust. An ex-sannyasin said that about 20 disciples invested in the deal, and another 20 worked on the bus.

The European run ended prematurely in Yugoslavia, where officials discovered the contraband and put three sannyasins in jail for a year. At about the same time, other sannyasin drug couriers were caught in France, West Germany and other countries, increasing the unfavorable attention already aimed at the ashram.

Former sannyasins said the rash of arrests also aroused suspicion within the ashram that an informer was reporting couriers to the authorities, so the traffic began to diminish.

The British press had a field day with the 1979 arrests in Paris of three British sannyasins – Judith Ashton, 24, Anne Curland, 25, and Margot Gordon, 29 – on smuggling charges.

“Drugs girl seduced by cult” and “Slave-girls scandal” trumpeted the headlines over stories about their trials. Lawyers and members of the women’s families made even more sensational copy when they lashed out at the Rajneesh movement. Ashton’s lawyer told the court that she had been brainwashed, subjected to several sessions in a warm-water isolation tank and then forced to smuggle drugs.

All three were convicted, fined and sentenced to jail, although Gordon’s prison term was suspended.

The spotlight was intense enough to draw a response from Laxmi in a February 24, 1980, Rajneesh Foundation press release. She defended the movement’s meditation techniques and denied any foundation involvement in drug smuggling.

In the United States, some sannyasins either are facing charges now or have been convicted of drug crimes, although law enforcement officials said no evidence has been developed to link drug activity to high officials of the movement.

Dhyan Mario, 46, an Italian sannyasin also known as Mario Pirri, who was a regular visitor to Poona, has been a federal fugitive since October 27, 1980, when he was indicted on eight charges in Sacramento, California, as one of the financial backers in a plan to smuggle $19 million worth of hashish into the United States from the West Indies. Mario was one of 21 defendants in the case.

Sources said Mario was a member of a wealthy Sicilian family. He lived in the Poona ashram for a time and worked in its mala shop. More recently, Mario listed Rajneesh Investment Corp. in Rajneeshpuram as a business address, but officials at Rancho Rajneesh told Customs Service and U.S. Immigration and Naturalization Service investigators that they had never heard of him and that he hadn’t been to the ranch.

Travis G. Ashbrook, 40, who led the smuggling operation, was sentenced to 13 years in California’s Federal Correctional Institution on Terminal Island. He said he knew Mario – the two had discussed Rajneesh’s teachings frequently – but he insisted at first that Mario wasn’t involved in the case. Ashbrook later conceded that Mario, whom he described as a good sailor, had helped him find a boat to smuggle the hashish.

“I’m sure he knew what it was for,” Ashbrook said.

Ashbrook said he last saw Mario in September 1980 as the Italian was preparing to return to Poona. Mario told Ashbrook that he had been living outside the ashram on previous visits to Poona, although a former sannyasin recalled that Mario lived inside the compound when he returned to Poona for the last time. A sannyasin informant told the U.S. Customs Service that Mario and his girlfriend, a woman identified only as Valencia, donated $1 million to the movement after returning to the ashram in late 1980.

Ashbrook said that when the Sacramento indictments were returned, Mario – still in Poona – received word that he should stay out of the United States and that customs agents were carefully watching Rancho Rajneesh in hope of arresting him there. Ashbrook wouldn’t say how Mario was warned.

Ashbrook himself spent some time at the Geetam Rajneesh Sannyas Ashram in Lucerne Valley, California, where he became friendly with the ashram’s leader, a man identified only as Krishna Prem, 41.

“I’m sure he knew what I did – that I was marijuana, hashish smuggler,” Ashbrook said.

Once Ashbrook was arrested, Geetam Rajneesh officials offered to care for his wife and three children and to help raise money for his defense. Ashbrook said he declined the offer. His wife, Ann L. Ashbrook, 38, was a sannyasin at the time under the name Dhan Dhyano, but she has since left the movement and remarried.

Ashbrook said he intended before he was arrested to go to Poona to take sannyas and to meet Mario. After he was jailed, he wrote to the Poona ashram regularly, asking to take sannyas through the mail – a request that was never fulfilled.

“I got a mimeographed form letter about people in jail,” Ashbrook said, adding that it included “instructions from Bhagwan how to do your time.”

Another convicted drug dealer was active in the Purnam Rajneesh Retreat Center in Santa Cruz, California, until his arrest on passport fraud charges in 1981. Ronald Fred Fishman, 33, also known by the sannyasin name Anatosh Manglan and 11 other aliases, was a fugitive from drug charges in Colorado and Kansas when the FBI caught up with him in Santa Cruz.

In California, he was charged with two counts of making false statements on a U.S. passport application. He pleaded guilty April 21, 1982, and was fined $1,000 and placed on probation for five years. His wife, Leslie, 27, also known by the sannyasin name Sudhir, pleaded guilty to a single count of making a false statement on her passport application and was put on five-year probation.

The passport charges were filed after Fishman used phony names to apply for two passports. When the FBI searched Fishman’s backpack, they found a list of 30 names and birth dates – some with notations that copies of birth certificates had been requested. The FBI discovered that most of the people on the list were dead, including a customs agent who had been killed in the line of duty.

The FBI also found the names and telephone numbers of Rajneeshee officials in Oregon, including Sheela and four others – Padma, Dolma, Sagar and Sujato.

While Fishman’s notes didn’t list full names, similar names are used by Rajneeshee officials, and the phone numbers traced back to Rancho Rajneesh. Prem Padma, 36, also known as Suzanne Ceballos or Suzanne Pelletier, is a native of Albany, California, who is vice president of Rajneesh Neo-Sannyas International Commune. Dolma, 33, also known as Robin Reinhart, born in Monrovia, California, is the commune secretary.

Shanti Sagar is the sannyasin name of David Stanley Blumenthal, the husband of Yoga Mukta – the woman wanted in India in the currency-smuggling case. Sagar is an accountant for Rajneesh Foundation International, the Rajneeshee church. Prem Sugato, 35, a New York City native also known as Bonnie Lisbeth Klein, was once vice president of Neo-Balance Corp., a Rajneeshee wholesale business.

The FBI didn’t establish what contact, if any, Fishman had with the Rajneeshee officials. “It is not known if the nature of his association with the group was legitimate or for illegal purposes (i.e. creating fictitious identities for cult members for profit),” concluded an FBI report.

FBI interviews with sannyasins in Santa Cruz established that Fishman had attended a Rajneeshee meeting in Montclair, New Jersey, in August 1981, when Rajneesh was still staying there in a castle owned by Sheela’s Chidvilas Rajneesh meditation Center. No one could tell the FBI why Fishman went or what the meeting involved.

After his California case was settled, Fishman pleaded guilty to a 1977 marijuana charge in Walsenburg, Colorado, where he was put on two years’ probation and fined $1,115. He also pleaded guilty to a 1978 marijuana charge in Olathe, Kansas, where he was fined $716.

He was back in court by the end of 1982, when he was arrested in New York City and charged with taking part in a plan to invest $1 million to buy 15 tons of marijuana. The sellers turned out to be undercover agents of the U.S. Drug Enforcement Administration. Fishman was convicted of conspiracy in April. A month later, he began serving a five-year sentence at the federal penitentiary in Lewisburg, Pennsylvania.

The Rajneesh movement’s policy of welcoming all comers, regardless of misdeeds and especially if wealthy, was established in Poona and was emphasized in a 1980 Rajneesh Foundation press release.

“Our gates are open to everyone – to the sinner as well as the saint,” Laxmi was quoted as saying. “The fact is that if everyone who came here was already pure in heart and mind, there would be no need for them to come to Bhagwan in the first place.”